The UK’s investment into renewables in recent years is beginning to pay dividends, especially in the context of the current energy price crisis. Renewables are now significantly reducing the UK’s dependence on gas, while projects supported by the Contracts for Difference (CfD) scheme are now saving consumers money on their energy bills.
Energy prices have skyrocketed over the past year, resulting in Ofgem increasing the Energy Price Cap by 54% in April to £1,971 per year for a typical household. With further fallout likely as a result of sanctions placed on Russia following its invasion of Ukraine, the cost of living, and in particular the cost of energy, will dominate this year’s political agenda.
This energy crisis has precipitated an intense debate about the future of UK energy policy, with some blaming the UK’s investment in renewables and the wider net zero agenda for driving costs up. They argue for the abolition of so-called ‘green levies’ on energy bills, which are used to fund renewables through the CfD scheme and Feed-in Tariffs, as well as energy efficiency measures.
But how accurate is it to say that renewables subsidies contribute additional costs to household bills? Are taxpayers still subsidising a nascent market, or do renewables now save customers money?
Whatever steps are taken to assure energy security in the short term, now is not the time to divest from renewables or to delay the transition to cleaner energy sources. Renewable energy increasingly delivers lower costs for consumers and industry. If ministers want a way out of the current crisis, it lies in doubling down on current policy rather than diluting it.
This report is produced as part of our Getting to Zero research programme.
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